The idea behind debit card cash back transactions is as simple as making change for any payment over the exact amount. At checkout, the customer can enter an amount of cash they would like to receive back. That amount is added to their purchase total, and the merchant gives the overage back as cash from the register. Cash back can only be given on debit card transactions, not credit cards (although Discover offers an exception to this rule).
Merchants can decide how much cash they are willing to offer back, but there are maximum upper limits, set by the card networks, which vary from region to region.
On the back end of the transaction process, cash back requires some special handling. What this means for merchants is that their payment terminals must have cash back functionality. They must be able to track the transaction and cash back amounts separately so they can be identified in authorization and clearing messages, and they must be able to handle Issuer Responses related to the cash back service.
Another rule is that merchants cannot process cash-back-only transactions; the total transaction amount must be higher than the cash back amount.
Though its widely used in America. Its NOT that much used in europe countries. For example, Its NOT allowed in netherlands
